*1728 A waiver of the time within which the assessment of a deficiency in income and profits tax for 1918 may be made authorizes the collection of a deficiency in tax theretofore assessed.
*1331 This is a proceeding for the redetermination of a deficiency in income and profits tax for 1918 in the amount of $41,962.28. By an amended answer to the petition the respondent has moved to increase the deficiency in the amount of $4,066.46 by reason of the fact that he erroneously allowed such an amount as a tax previously assessed in the computation of the deficiency. The only point in issue is whether the statute of limitations had operated to prevent the collection of any deficiency.
The facts were stipulated.
*1332 FINDINGS OF FACT.
The petitioner is a corporation, with its principal office in Milwaukee, Wis.
The petitioner filed its income and profits-tax return for the calendar year 1918 on June 13, 1919. The original tax assessed for the calendar year 1918 on the basis of the return referred to above was $15,561.65. An additional tax*1729 for the calendar year 1918 was assessed against petitioner in the amount of $89,554.55 on March 14, 1924.
On February 28, 1924, the petitioner executed an income and profits-tax waiver consenting:
* * * to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of the said corporation for the year 1918 under the Revenue Act of 1921, or under prior income excess-profits, or war-profits tax Acts, * * *
The waiver was to continue in effect from the date it was signed by the taxpayer for a period of one year after the expiration of the statutory period of limitation or the statutory period of limitation as extended by any waivers already on file with the Bureau under which assessments of taxes might be made for the year mentioned. This instrument was duly received in the Commissioner's office and accepted by him.
Under date of November 19, 1925, the petitioner executed a further income and profits-tax waiver, by which it waived the time prescribed by law for making any assessment of the amount of income, excess-profits or war-profits taxes due under any return made by or on behalf of*1730 the taxpayer for the year 1918 under existing revenue acts or under prior revenue acts. This waiver was to continue in effect until December 31, 1926. It was duly filed with the Commissioner's office and accepted by him.
Under date of November 22, 1926, the petitioner executed a further income and profits-tax waiver of like tenor with the foregoing, which was to remain in effect until December 31, 1927. This waiver was properly executed, received in the Commissioner's office, and accepted by him.
A claim for the abatement of income and profits taxes for the calendar year 1918 in the amount of $89,554.55 was filed by the petitioner on March 19, 1924, after having received from the collector a notice and demand for the payment of the tax, such notice and demand having been dated March 17, 1924. The Commissioner, by a deficiency letter dated January 21, 1927, allowed the claim for abatement for $47,592.27 and rejected it for $41,962.28. By amendment to the answer to the amended petition filed June 12, 1929, the *1333 Commissioner asks a reduction in the amount allowed upon the claim in abatement from $4,592.27 to $43,525.21.
Payments and credits against the income*1731 and profits taxes assessed against petitioner have been made as follows:
| Payment | Credit | |
| Mar. 15, 1919 | $12,502.56 | |
| June 16, 1919 | 3,059.09 | |
| Feb. 13, 1925 | $1,624.66 | |
| May 20, 1925 | 374.64 | |
| Apr. 13, 1927 | 1,291.82 | |
| Mar. 15, 1928 | 33.77 |
The petitioner, upon demand of the collector of internal revenue for the Eastern District of Wisconsin for the payment of income and profits taxes for the year 1918 outstanding against the petitioner, filed with said collector a surety bond in the amount of $45,000, executed October 12, 1927, by the petitioner as principal, and the Maryland Casualty Company, Baltimore, Maryland, a corporation, as surety, to stay the collection of the deficiency due for the calendar year 1918.
The petitioner upon demand of the collector for the district above mentioned for the payment of income and profits taxes for the year 1918 outstanding against petitioner, filed with said collector a surety bond in the amount of $7,000, executed October 28, 1927, by petitioner as principal, and the Maryland Casualty Company of Baltimore, Maryland, as surety, to stay the collection of the deficiency due for the calendar year 1918.
The notice of deficiency*1732 from which this appeal was taken was mailed to petitioner on January 21, 1927. The petition for the redetermination of the deficiency claimed to be due from the petitioner was filed with this Board on March 21, 1927.
In 1924 the petitioner paid an additional surtax for the year 1918 to the State of Wisconsin in the amount of $2,746.76. Said amount has not been allowed as a deduction by the Commissioner in determining the net income of $115,169.29 shown by said deficiency notice for the year 1918. Such amount of $2,746.76 is a proper deduction from gross income in determining net income for 1918.
The amount of tax previously assessed for the year 1918 is incorrectly stated in the notice of deficiency forming the basis of this appeal to be the amount of $109,182.66. The correct tax previously assessed is as follows:
| Original assessment, account #41928 | $15,561.65 |
| Additional assessment March 1924 List | 89,554.55 |
| Total amount of tax previously assessed | 105,116.20 |
*1334 The aforesaid claim for abatement was under consideration in the Bureau from the date of the filing of said claim until its rejection in part by the letter dated January 21, 1927. At*1733 various times during the consideration of the aforesaid claim conferences were held, at which petitioner was represented. During the time that the aforesaid claim was under consideration in the Bureau the petitioner made no contention that the collection of the taxes in controversy was barred by the statute of limitations.
OPINION.
SMITH: The petitioner contends that the deficiency in income and profits tax for 1918 is barred from collection by the operation of the statute of limitations.
No question is raised but that the deficiency was legally assessed against the petitioner in the amount of $89,554.55 on March 14, 1924. Petitioner first contends that the Commissioner should have proceeded to collect the assessment within the period of the statute of limitations extended by the waiver of February 28, 1924. Without that waiver the collection of the assessment was barred five years from the date the return was made. Since the return was made on June 13, 1919, the bar of the statute fell (without consideration of the waiver) on June 13, 1924. The waiver, however, clearly extended the time to June 13, 1925.
*1734 The next waiver was filed by the petitioner on November 19, 1925, and that waiver was only a waiver with respect to the time of the assessment of the deficiency. We understand the contention of the petitioner to be (no brief was filed) that this waiver executed after the statutory period of limitation had expired and being only for the assessment of the tax, is not effective to extend the period within which the deficiency may be collected. In , it was held that a waiver of assessment was intended to "embrace all the steps necessary for the ultimate collection of the tax." The Supreme Court has also held that a waiver given after the statute of limitations had fallen is binding upon the taxpayer. . We must therefore hold that the waiver given on November 19, 1925, and effective to December 31, 1926, is a valid waiver for the collection of the deficiency.
The waiver of November 22, 1926, further extended the time for assessment to December 31, 1927, and within that period the Commissioner sent the deficiency notice to the taxpayer. In accordance with the decisions above*1735 cited, it must be held that the collection of the deficiency is not barred.
*1335 As above indicated, the Commissioner moved to correct the deficiency notice by increasing the amount of the deficiency by $4,066.46. This was plainly an error due to inadvertence. The motion for increasing the deficiency is allowed.
Judgment will be entered under Rule 50.